CHIEF ADMINISTRATOR PUDA AND ANOTHERversusMRS. SHABNAM VIRK

               CHIEF ADMINISTRATOR PUDA AND ANOTHER                                A
                                         V.

                             MRS. SHABNAM VIRK

-                               MARCH 23, 2006

              [ARIJIT PASA YAT AND TARUN CHATTERJEE, JJ.]                          B


           Consumer Protection Act, 1986-Housing Scheme-Demand of increased
    cost of flat-Advertisement inviting applications indicating tentative cost of
    flat and that it was to be revisetf..-:AJ/otment letter demanding increased cost C
     offlat-Affidavit of allottee accepting the allotment and undertaking to abide
     by terms and conditions of the allotment letter-Allqttee, if liable to pay ·,
     increased price stipulated in the letter-Held: Yes, si1Jce allottee had filed an
     affidavit undertaking to abide by the terms and conditions of the letter-
     Punjab Regional and Town Planning and Development Act, 1995.
                                                                                   D
          Appellant-State Development Authority invited applications for
    allotment of Oats fixing its costs at Rs. 6.3 lacs under the Scheme. The
    price quoted was tentative, based on present cost of construction and was
    likely to be revised on higher side on completion of houses. Respondent
    and others applied for the flat undertaking to abide by the terms of the
    Scheme. On completion of flats, draw was held for allotment of specific         E
    flat and allotment letters were issued indicating the base price of the flat
    as Rs. 7.67 lacs. Respondent flied an affidavit undertaking to abide by the
    terms and conditions of the allotment letter. Respondent deposited 25%
    of the price stipulated and took possession of flat. Thereafter, he filed a
    complaint that he was not liable to pay any aiMunt over and above the           F
    price advertised. District Forum held that there was a clear condition in
    the advertisement that the price quoted was purely tentative and it was
    likely to be revised on the higher side on completion of flats. However, it
    directed the appellants to pay 12% interest on account of delay in handing
    over the possession. State Commission directed the appellant to charge
    only the price which was advertised while inviting the application and to       G ·
    pay 12% interest. National Commission held that there was no delay by
    the appellant in handing over the possession. However, only the price
    advertised while inviting application for allotment could be charged.
    Hence, the present appeal.
                                         221                                        H
     222                   SUPREME COURT REPORTS                   l2006 j 3 S. C.R.

A          Allowing the appeals, the Court

           HELD: Respondent herself had accepted in the undertaking filed
    that she accepted the allotment of the house and undertook to abide by
    all the terms and conditions of the allotment letter, the amount indicated
    in the allotment letter was the revised amount on the higher side in respect
                                                                                       -
B   of the allotment of the house. That being so the respondent was liable to
    pay the amount as stipulated in the allotment letter. Nothing is found in
    the quoted clause to show that the increase was possible only when there
    was an increase in the cost of construction. The clause quoted does not
    reflect any such intention of the parties. (226-B-DJ

c        CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 3967-3968
    of 2004.

         From the Final Order dated 26.8.2003 of the National Consumer Disputes
    Redressal Commission, New Delhi in Revision Petition No. 1206-1207 of
D   2002 and Order dated 17.3.2004 in Review Petition No. 31/2004.

           Altaf Ahmed, Mrs. Rachana Joshi Jssar for the Appellants.

          Manoj Swarup. Neeraj Sharma, Naresh Kaushal, Dinesh Verma, Ms.
    Suresh Kumari, A.P. Mohanty, G.K. Bansal (N.P.), R.K. Talwar. S.S. Virk,
E   Amit Talwar and S.L. Aneja for the Respondent.

           The Judgment of the Court was delivered by

          ARIJIT PASA YAT, J. Challenge in these appeals is to the order passed
    by the National Consumer Redressal Commission, New Delhi (in short the
F   'Commission'). The Commission held that as delay in handing over the
    possession was clearly established and the reasons in price escalation of the
    house was not proved or established, the respondent was entitled to get the
    house at Rs.6.3 lacs instead of Rs.7.44 lacs as demanded by the appellants.

          Background facts in a nutshell, as projected by the appellants are as
G   follows:

           On 15.8.1995 the appellants floated a scheme for allotment of784 four
    story MIG (SUPER) flats on hire purchase basis at SAS Nagar,(Mohali). The
    scheme opened on 15.8.1995 and was to close on 14.9.1995. As per the
    advertisement inviting applications for allotment under the said scheme, the
H   tentative cost of the flat was fixed at Rs.6.3 lacs. However, condition (2)
 CHIEF ADMINISTRATOR PUDA v. SHABNAM VIRK [PASAYAT, J.]223

therein clearly specified that the price quoted is purely tentative and based on     A
the present cost of construction and that it was likely to be revised on the
higher side by the time houses are completed. The said clause reads as under:

        "The price quoted is purely tentative and is based on the present cost
        of construction. It is likely to be revised on the higher side by the
        time houses are completed."                                                  B
     The advertisement further stated that the allotment shall be governed
by PUDA under rules and regulations framed/amended from time to time.

      On 27.3.1996 pursuant to the aforesaid advertisement, a large number·
of applicants (including the respondent) applied for a MIG Super Category C
flat under the scheme in the prescribed Proforma Clause 12(ii), (iii) & (iv)
of the said Proforma read as under:

        "(ii) I have carefully gone through and understood the terms and
        conditions of the scheme applied and do hereby undertake to abide
        by the same.                                                                 D
        (iii) I also undertake to pay higher cost due to fluctuations in the
        prices of building material or due to any other reason.

        (iv) I shall abide by the terms and conditions of the allotment made
        by the PUDA as amended from time to time and shall enter into such           E
        agreement in any manner and at any time, as stipulated by PUDA."

       Prior to the construction of the flats, the first draw for allocation of
flats, was held on 7.12.1995. On the basis of this draw held prior to the
construction of flats, allocation letters (including allocation letter dated
27.3. I 996 issued to respondent) were issued. In the said allocation letters, the   F
tentative cost of each flat was stated to be Rs.6.30 lacs. The said figure was
purely provisional, as was made explicit by Note (i), (ii) & (iii) contained in
the said allocation letter, which read as under:

        "(ii) The aforesaid price is purely tentative. The actual price shall be
        determined on completion of House/Flat and you shall be liable to            G
        make payment of the revised .price of thbe Houses/Flats, if any, at
        the time of allotment.

        (iii) Earnest Money already deposited with the Board will be adjusted
        with the instalments required to be deposited before taking over
                                                                                     H
      224                     SUPREME COURT REPORTS                     [2006] 3 S.C.R.

 A             possession."

            Note (i) contained in said al_location letters gave the tentative date when
      the flats were expected to be completed. The said note stated:

               "Houses/Flats are likely to be completed by April 1997. This date is
 B             however tentative and may change."

           The applicants accepting the allocation were required to submit affidavits
     to the effect that they would abide by the terms and conditions of allocation
     and the respondent submitted the required affidavit dated 15.4.1996. 784
     MIG (Super) flats were completed in the years 1998 and second draw was
C    held for allotment of specific flat numbers to applicants successful in the first
     draw, including the respondent and allotment letters dated 21.8.1998 were
     issued to the applicants including the respondent.

           On 16.10. I998 the respondent accepted the terms and conditions of the
     allotment letter by tendering an affidavit dated 16.10.1998 to abide by the
D    terms and conditions of the allotment letter as well as of the provisions of the
     Punjab Regional and Town Planning and Development Act, 1995 (in short
     'the Act') and rules framed thereunder.

            On August, 1998 at the time of issue of the allotment letter the base
E price of the flats in question was calculated to be Rs.7,67,000/-. Further a
     slab system was fixed for different floors which is as follows :

            Ground Floor          Rs. 8,05,400 (5% extra on the base price)

            First Floor           Rs. 7,67,000 (the base price) Second Floor -
                                  Rs.7,51,600 (2% less than the base price)
F
            Third Floor           Rs. 7,44,000 (3% less than the base price)

            Upon receipt of the respective allotment letters, the applicants, including
     the respondent who opted to accept the allotments, furnished affidavits clearly
G    stating that they would abide by all the terms and conditions of the allotment
     and by the provisions of the Act and the rules framed thereunder from time
     to time.

         On 21.10 .1998 u"pon depositing 25% of the price of the flat as stipulated
  in the allotment letter, the respondent took possession of the flat. On 12.5.1999
H the respondent filed complaint No. 486 of 1999 dated 12.5. 1999 before the
 CHIEF ADMINISTRATOR PUDA v. SHABNAM VIRK [PASAYAT, J.]225

District Consumer Disputes Redressal Forum, Chandigarh (in short 'the District A
Forum') claiming, inter alia, that he was not liable to pay any amount over
and above the price which was advertised while inviting applications for
allotment much prior to the construction of the houses. The District Forum
by order dated 17 .10.200 I held that the price quoted was purely tentative and
it was likely to be revised on the higher side by the time the houses are
completed as there was clear condition to that effect in the advertisement. B
However, it directed the appellants to pay interest at the rate of 12% on the
amount of Rs.1,03,000/- for a period of I year and 4 months on the ground
that houses were likely to be completed by April, 1997 but the possession
was handed over in August, 1998. Both the appellants and respondent preferred
separate appeals before the State Commission, Chandigarh. The said C
Commission dismissed the appeal filed by the appellants and allowed the
other appeal. The State Commission directed the appellant No. I Authority to
charge only the price which was advertised while inviting the application for
allotment and to pay interest at the rate of 12%. A revision petition was filed
before the National Commission under Section 2 l(b) of the Consumer
 Protection Act, 1986 (in short the 'Consumer Act'). The Commission held D
that there was no delay on the part of the appellant No. I Authority in handing
 over the possession. However it held that only the price which was advertised
 while inviting application for allotment could be charged. The Review
Application filed was dismissed.
                                                                              E
       In support of the appeals, learned counsel for the appellant submitted
that the complaint was thoroughly misconceived as the allotment was made
on 21.8.1998 and the price indicate.d was Rs.7.44 lacs. Same was accepted
by letter dated 16. l 0.1998 and the terms of acceptance were contained in the
accompanying affidavit. It was clearly stated in the affidavit dated 16. l 0.1998
that the allotment of the MIG (Super) house was accepted and the deponent F
undertook to abide by all the terms and conditions of the allotment letter.
With reference to the undertakings learned counsel for the appellants submitted
that the order of the National Commission is clearly erroneous. The clause
which has been used to fasten liability on the appellants clearly stipulates that
the price quoted is purely tentative and is based on the present cost of G
construction and likely to be revised by the time the house was completed.
It was, therefore, submitted that the demand raised by the appellants was
justified and the National Commission did not appreciate the position correctly
and held that the respondent was liable to pay at the earlier rate.

      Learned counsel for the respondent on the other hand submitted that H
                                                                                        t
    226                     SUPREME COURT REPORTS                     (2006] 3 S.C.R.

A price quoted could be changed only if there was escalation in the cost of
    construction. As the details filed would go to show, there was no increase in
    the cost of construction, rather there was decrease.

           It is to be noted that the respondent herself had accepted in the
    undertaking that she accepted the allotment of the house and undertook to
B   abide by all the terms and conditions of the allotment letter. It is not in
    dispute that in the allotment letter the figure as demanded has been reflected.
    That being so the respondent was liable to pay the amount as stipulated in
    the allotment letter.

           As there is no dispute that the respondent had in fact filecj an affidavit
C clearly indicating that she undertook to abide by all the terms and conditions
    of the allotment letter, the amount indicated in the allotment letter was the
    amount in respect of the allotment of the house. We find nothing in the
    quoted clause to show that the increase was possible only when there was an
    increase in the cost of construction. The clause quoted above does not reflect
D   any such intention of the parties.

          Above being the position the National Commission was clearly in error
    granting relief to the respondent. The appeals are allowed. No costs.

    N.J.                                                         Appeals Allowed.